Stormont crisis 'limits NI Protocol advantages'
- Published
The Northern Ireland Protocol affects Northern Ireland's trade relationship with the EU and Great Britain
Continual uncertainty in Northern Ireland is restricting opportunities for investment in capital, skills and jobs, a leading think tank has warned.
The National Institute of Economic and Social Research (NIESR) said the economy had a "somewhat robust recovery" post-pandemic relative to other UK regions.
The NI Protocol and EU single market access was part of the reason, it suggested.
NIESR warned this may not last.
"In the face of policy paralysis and political uncertainty, gains for Northern Ireland seem to be only temporary," the institute reported.
The protocol is a post-Brexit arrangement which was agreed by the UK and EU to keep Northern Ireland aligned with the EU's single market for goods.
This gives Northern Ireland manufacturers better access to the EU than companies in other parts of the UK.
It also means there are checks and controls on goods entering Northern Ireland from Great Britain, leading to added cost and complexity for importing businesses.
The functioning of Northern Ireland's executive and assembly have been blocked by the Democratic Unionist Party in its protest against the protocol, which it has argued has undermined Northern Ireland's position in the UK.
'Protocol gave a temporary boost'
NIESR has previously used economic modelling to look at Northern Ireland's performance compared to a situation where there was no protocol.
It has updated that work and again concludes that the Northern Ireland economy would have fared worse without the protocol in the short-term, external.
However, it still expects growth to converge to the UK average unless there is political stability and more fundamental economic reform.
"The protocol should be viewed as a temporary boost, but to convert this into long-term success, policymakers must focus on getting Stormont to function again, improve devolved decision making, find better skills-jobs matches, and increase productivity and employment in the region," it said.
"Increased political uncertainty mitigates against any opportunities that Northern Ireland may have of drawing upon advantages potentially created by the NI Protocol."
The UK government is currently planning to override most of the protocol if the EU does not agree to radical changes.
On Thursday, Prime Minister Rishi Sunak said he was confident that "with goodwill and pragmatism" a breakthrough can happen in negotiations.
He was speaking after talks with Taoiseach (Irish Prime Minister) Micheál Martin following a meeting of the British-Irish Council.
Mr Sunak said his focus was to find a negotiated solution with the EU and he was pleased with the progress being made.
Mr Martin said that both he and Mr Sunak had agreed there was a "window of opportunity" to resolve issues regarding the protocol.